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Tax season will officially kick off on Jan. 29, the Internal Revenue Service has announced. It will run through April 17 — thanks to April 15 falling on a Sunday and April 16 being Emancipation Day in Washington, D.C.
But this doesn’t mean you should wait until April 17 to file your 2017 taxes — or even wait until Jan. 29 to start preparing them. On the contrary, besides the usual advantages to filing your taxes sooner than later, there’s the newly overhauled tax code to consider.
Plus, the IRS notes that many tax-filing software companies will accept tax returns before Jan. 29. They will hold your return and submit it for you when Jan. 29 arrives.
So, here are three significant reasons to get a jump on your 2017 taxes:
1. You might get an even bigger refund this year
Knowing you are getting a refund is always a great reason to file earlier. After all, why should you wait to take back from Uncle Sam what rightfully belongs to you?
And thanks to the recent tax overhaul, you might receive more money in this year’s refund check.
Many facets of the federal laws governing income taxes — aka, the U.S. tax code — were just rewritten due to the Tax Cuts and Jobs Act becoming law in December.
Most changes stemming from the tax code overhaul will not affect your 2017 tax return — the one you’ll file this year. Check out “3 Big Ways the Tax Overhaul Will Affect Your 2018 Tax Return” to learn more about how changes will complicate next tax season.
There are some exceptions to that timing, however.
For example, one way the overhaul changed the tax code was by temporarily lowering the threshold for tax-deductible medical expenses — including for tax year 2017.
Since 2010, the tax code had set this threshold at 10 percent. In other words, if you had eligible medical expenses that amounted to more than 10 percent of your taxable income, you had the option to write off some of those expenses.
Under the newly overhauled tax code, however, the threshold is 7.5 percent for tax years 2017 and 2018. It reverts to 10 percent after that.
For more information about claiming this deduction, check out the IRS website’s “Medical and Dental Expenses” page.
2. You stand to get your refund sooner
Generally, the sooner you file a return, the sooner you will receive your tax refund from the IRS.
To further ensure you see that money ASAP, file your taxes electronically and opt to receive the funds via direct deposit into a bank account. The IRS explains in a recent tip sheet about preparing for this tax season:
“Electronically filing a tax return is the most accurate way to prepare and file. Errors delay refunds and the easiest way to avoid them is to e-file. Combining direct deposit with electronic filing is the fastest way for a taxpayer to get their refund.”
There are several ways to file your taxes electronically, also known as “e-filing.” They include using:
- IRS Free File
- Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs
- Commercial tax preparation software
- A tax professional
According to the IRS, 70 percent of taxpayers are eligible to e-file using the IRS Free File program. It makes tax-filing software available for free to folks whose income is below a certain amount. The IRS currently sets that amount at $66,000.
If you’re interested in using software but are ineligible for IRS Free File, check out “Maximize Your Tax Refund by Choosing the Right Tax-Filing Tool.”
3. You will better protect your refund from potential thieves
In recent tax seasons, one growing concern has been the possibility of identity thieves using your stolen personal information to file a tax return in your name. The thieves then reroute your tax refund to themselves.
This is particularly true for the 2017 taxes of folks impacted by the Equifax data breach last year. This tax season is the first since hackers stole the personal data — including Social Security numbers — of tens of millions of consumers from the consumer credit reporting agency.
Perhaps the best way to guard against tax-refund theft is to file your taxes ASAP, as we explained last year in “Tax Hacks 2017: Avoid These 12 Costly Tax-Related Scams.”
Will you file your taxes early? Tell us why by sharing your thoughts below or on our Facebook page.